Production Processes Flashcards
What is production
The process of changing in ours, such as labour services, and natural and man made resources, into goods and services that can be sold.
Methods of production
Job production and flow production
Job production
A method of production in which a product is supplied to meet the exact requirements of a customer
Why is job production often used for smaller businesses?
Can be attractive to customers as it’s likely to meet their needs more fully - higher sales
Businesses can charge higher prices as customers will value specific goods and services
Small business can compete with large ones as they can produce good and services more cheaply but can’t use job production due to size. Can advertise products - designed and made for individuals
Job production drawbacks
Expensive - each job is different and may need more resources to complete it. More employee time required
Employees need more training to design and produce different goods and services - increasing costs
Flow production
Occurs when an item moves continuously from one stage of the PP to the next.
Flow production advantages
It can help business to business to produce at a lower unit cost - economies of scale. Fewer resources are used because large number of standardized made. Sell lower price.
Employees can become specialized in certain aspects of production. Efficient and produce each good cheaply
Businesses can produce goods and services in large quantities - assist them in entering new markets and increasing market share.
Disadvantages of flow production
Can be costly - large business afford staff training and necessary equipment
May be less efficient - if business sells fewer products, production line may not be used but still paid for
Many customers want choice and this is difficult to supply with flow production system.
Employees within flow production systems are expected to complete similar tasks repeatedly - demotivating
How can a business increase its efficiency
Training and managing employees effectively
Using technology to support production
Minimizing the number of faulty products produced
Lean production
Aims to minimize waste. Waste adds to businesses cost of production without earning income. Unsold products, faulty products, excess stock of raw materials and components that may become unusable over time.
Just in time production
Holding as little stock possible. Items are ordered JIT to be used. Avoids storage costs and the risk of becoming unusable. Only requests the supplies needed for production when customer orders. Improves efficiency by reducing costs, but is dependent on supplies being delivered promptly
Kaizen
Japanese for continuous improvement. Requires employees to suggest small improvements that could be made in production. Each may be small, but can have a significant impact on waste reduction and increasing the efficiency.
